‘A small victory’

Gov. John G. Rowland signed a budget package last week that included an increase in the conveyance tax, much to the chagrin of Realtors statewide.

The increases in the conveyance tax, or the tax attached to the sale of a home, were only at the town level. State conveyance taxes remained the same.

Under the increase, the tax will be raised from 0.11 percent to 0.25 percent of the sales price. The state tax will stay at 0.5 percent of the sales price. Originally, the tax had been proposed at 0.5 percent at the town level and 0.75 at the state level.

However, a grassroots campaign spearheaded by the Connecticut Association of Realtors urged legislators to lower the increases.

In a prepared release, CAR asserted, “It’s unfortunate that in their attempt to fix the state’s budget crisis, our lawmakers have made a decision that will endanger what has been a healthy real estate sector that has been driving the Connecticut economy through the two years. Connecticut’s home sellers deserve better.”

“I think the modifications had a lot to do with the press coverage and the fact that people started calling legislators,” said Maureen Campbell, vice president of corporate and relocation services at H. Pearce Real Estate Co. “It’s still burdensome in my opinion, but it’s a small victory. This is a better situation that what was originally proposed, but it’s still not a fair and equitable tax. It’s not a broad-based tax.”

Denise Robillard, president of the Connecticut Association of Realtors, said in a prepared statement, “This new sales tax on the purchase of home as well as the increase in the existing tax represents a huge increase and an unfair tax burden on a very small portion of the taxpayers in the state. It will discourage middle- and low-income families from purchasing new homes.”

Both Robillard and Campbell were quick to point out that although they disliked the increases, they were more concerned with the targeted town tax.

‘More Onerous’

Included in the budget package was a clause allowing 18 specific towns to increase their conveyance tax an additional 0.25 percent. The communities are Bloomfield, Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury and Windham.

“I think that this targeted tax is going to really impact most of our cities and urban areas. From a real estate perspective it’s really counterproductive,” said Campbell.

“Many of these towns already have higher tax bases on personal properties, so to impose another tax will make it even more onerous to live there. The more taxes, the worse it is,” said Robillard. “With these 18 towns singled out you have 18 separate governing bodies that will have the opportunity to address this at their local level. It becomes a very complicated issue because instead of just one governing body to deal with, you have more than a dozen.”

The increases are scheduled to go into effect on March 15 and slated to be rescinded in June of 2004, the end of the next fiscal year.

“It’s supposed to sunset by June 30 of 2004, and we’re hoping that will happen,” said Robillard, noting that when the conveyance tax originally was introduced it was supposed to disappear or be reduced at a later date and that never happened.

“We’re going to follow this issue and make it very clear that we expect these increases to go away,” she said.

Robillard will be meeting with legislators and Realtors over the next few months to stay abreast of the issue and reaffirm CAR’s position.